Fed Expected to Hold in October, Then Hike in December and January

UBS analysts see the Fed leaving rates unchanged at the October FOMC meeting, then delivering quarter-point hikes in December and January, followed by a prolonged pause. Chairman Warsh appears to lean toward three total hikes including September. Treasury yields rose, with the 10-year at 5.127%, as BMO notes challenges in delivering a pause while keeping a December hike priced in. European credit stress intensified, with the iTraxx Crossover index rising 5 bps to 320 bps, as French unrest and fiscal concerns weigh. Canada's September inflation was softer than expected, reducing the likelihood of a BoC rate hike next week. California existing home sales fell 3.4% MoM. Tokenized gold volumes surged to $90B in Q1 2026. Bitcoin volatility is expected to remain elevated through November due to midterms and earnings.